A record breaking stock market is distorting a frightening reality: The U.S. is being eaten alive by a horrific cancer that will ultimately destroy the economy and impoverish the vast majority of its citizens.

That's according to Peter Schiff, the best-selling author and CEO of Euro Pacific Capital, who delivered his harsh warning to investors in a recent interview on Fox Business.

"I think we are heading for a worse economic crisis than we had in 2007," Schiff said. "You're going to have a collapse in the dollar...a huge spike in interest rates... and our whole economy, which is built on the foundation of cheap money, is going to topple when you pull the rug out from under it."

Currently, Bernanke and company is buying $1 trillion of Treasury and mortgage bonds a year. That's about $85 billion per month against a budget deficit that is about the same level.

According to Schiff, these numbers are unsustainable. And the Fed has no credible "exit strategy."

Eventually interest rates will rise... and when they do, Schiff says, stocks will tank and bonds dip to nothing. Massive new tax hikes will be imposed and programs and entitlements will be cut to the bone.

"The crisis is imminent," Schiff said. "I don't think Obama is going to finish his second term without the bottom dropping out. And stock market investors are oblivious to the problems."

"We're broke, Schiff added. "We owe trillions. Look at our budget deficit; look at the debt to GDP ratio, the unfunded liabilities. If we were in the Eurozone, they would kick us out."

Schiff points out that the market gains experienced recently, with the Dow first topping 14,000 on its way to setting record highs, are giving investors a false sense of security.

"It's not that the stock market is gaining value... it's that our money is losing value. And so if you have a debased currency... a devalued currency, the price of everything goes up. Stocks are no exception," he said.

"The Fed knows that the U.S. economy is not recovering," he noted. "It simply is being kept from collapse by artificially low interest rates and quantitative easing. As that support goes, the economy will implode."

A noted economist, Schiff has been a fierce critic of the Fed and its policies for years. And his warnings have proven to be prophetic.

In August 2006, when the Dow was hitting new highs nearly every day, Schiff said in an interview: "The United States is like the Titanic, and I'm here with the lifeboat trying to get people to leave the ship... I see a real financial crisis coming for the United States."

Just over a year later, the meltdown that became the Great Recession began, just as Schiff predicted.

He also predicted the subprime mortgage bubble burst, nearly a year before the real estate market fully crashed.

His recent warnings, however, have been even more alarming. Will they also prove to be true?

In his most recent book, "The Real Crash" How to Save Yourself and Your Country", Schiff writes that
when the "real crash" comes," it will be worse than the Great Depression.

Unemployment will skyrocket, credit will dry up, and worse, the dollar will collapse completely, "wiping out all savings and sending consumer prices into the stratosphere."

When the federal reserve will raise the interests, many people think that the entire collapse will happen. So far the federal reserve raised the mortgage interests. It seems like some elites do nothing and wait for the economic collapse, what are your thoughts on this?

Its about time America elect an economist President, Lawyers creates Chaos?

I don't know about that, I believe it is much more than just a president, it is about a system allowing some destructive business models and not protecting the people work force like they are supposed to do which put an enormous pressure.

It is possible that this stretch was too much and it is breaking a part now. I don't even know if it is possible to reverse the whole thing after going so deep.

__________________"The secret of freedom lies in educating people, whereas the secret of tyranny is in keeping them ignorant."

The current system is far too beneficial to the Fed, the banks and the politicians.
It will not change unless it is changed from the outside.
The Fed benefits from controlling the currency.
The member banks benefit from the Fed's policies.
And the politicians benefit from all the "free money" the Fed prints, which allows them to buy votes.

The current system is far too beneficial to the Fed, the banks and the politicians.
It will not change unless it is changed from the outside.
The Fed benefits from controlling the currency.
The member banks benefit from the Fed's policies.
And the politicians benefit from all the "free money" the Fed prints, which allows them to buy votes.

So, we can say that we are relevant when we are supporting Ron Paul? Of course! Ron Paul is one kind of politician having courage and energy to fight what oppress the people from raising in our society.

Some elites don't want us to be wealthy, or at least wealthier. They want us to stay in our conditions or class. People need to understand that it always have been a war class from time immemorial.

Too bad for them, the spirit and the philosophy of Ron Paul is still alive and will always be present.

__________________"The secret of freedom lies in educating people, whereas the secret of tyranny is in keeping them ignorant."

This post is not directed at anyone in particular. It is along the lines of if the shoe fits, wear it.

Class warfare is not a one way street. The simple truth is that if many of "oppressed" spent the the time they use for complaining in a positive productive manner, they would no longer be "oppressed".

"Poor people generally have poor ways", author unknown.

I disagree with your ideas that positive productive manner. I can see that you are not in the actual market labor or you didn't work recently in a multi national corporation.

The way that positive productive manner is finish! I repeat, it is finish and even if that still exist in small business operation, it will be unsustainable in this kind of economy anyway.

You have to understand that we are in a dumping international market, everyday you can see that authorities are saturated by anti-dumping complaints by differents emmerging countries that do not respect the trade agreements.

You can look up in search engines by this keyphrase "unfairly traded products" and you will see.

__________________"The secret of freedom lies in educating people, whereas the secret of tyranny is in keeping them ignorant."

A huge collapse in the dollar would make American goods and labor more valuable to the rest of the World. That could have some nice benefits such as a more consumer driven economy here at home. We wouldn't be able to afford goods that corporations are pimping from overseas.

I personally believe the powers that be would prefer to continue keeping the dollar elevated as there is still wealth left with our middle class that can be harnessed to boost corporate profits. They want the middle class to keep spending as much as possible while the profits from that spending are concentrated at the top.

A huge collapse in the dollar would make American goods and labor more valuable to the rest of the World. That could have some nice benefits such as a more consumer driven economy here at home. We wouldn't be able to afford goods that corporations are pimping from overseas.

I personally believe the powers that be would prefer to continue keeping the dollar elevated as there is still wealth left with our middle class that can be harnessed to boost corporate profits. They want the middle class to keep spending as much as possible while the profits from that spending are concentrated at the top.

I suggest you to read these two articles below, and believe me nobody want this happen.

“It's not what you look at that matters, it's what you see.” Henry David Thoreau

It is amazing how our own beliefs become part of how we perceive things. If we BELIEVE the sky is falling we can look around and see a thousand reason why we are right. If we believe there is GOOD in the world and we CAN make good things happen in our life we begin finding a thousand reason why it can be done.